WSJ: Is Time Running Out on the Swiss Watch Industry?

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WSJ: Is Time Running Out on the Swiss Watch Industry?

Post by gr8sw » Tue Mar 13, 2018 9:39 pm

https://www.wsj.com/articles/is-time-ru ... 1520867714


By Matthew Dalton
March 12, 2018 11:15 a.m. ET
341 COMMENTS

GENEVA—You’re 25 years old, basking in the glow of your first big job promotion and a hefty raise. Why not splurge on a big-ticket item?

Your father might have bought a fancy Swiss watch. But the thought doesn’t occur to you—for most of your life, you’ve used your cellphone to check the time. Instead, you book a getaway to Costa Rica, which you document extensively on Instagram.

Swiss watchmaking executive Jean-Claude Biver wants to change that thinking. From his perch at luxury conglomerate LVMH Moët Hennessy Louis Vuitton, the 68-year-old has seen younger generations drift away from his centuries-old industry. He is on a mission to get them interested in watches, before it’s too late.

“It’s the first time we have young people not buying watches,” says Mr. Biver, who leads LVMH’s watch division. “Time is everywhere. Why should these kids buy something for the wrists that tells them the same thing they get everywhere?”

Executives across Switzerland’s watch industry have been wrestling with the same question. How can they convince young consumers that mechanical timepieces are relevant—let alone worth the price of a car? At the same time, the tradition-bound manufacturers are fending off Apple Inc. and other tech companies that are disrupting the market with wrist gadgets that track your workouts and organize your social life.

The perils facing the Swiss industry have been laid bare by a sharp downturn starting in 2015. Chinese consumers, who drove a two-decade boom in the watch business, reined in their spending. That exposed watchmakers’ growing disconnect with clientele in the West. Swiss watch exports globally fell 13% between 2014 and 2016. Last year, exports rose 2.7%, but still lagged well behind the luxury sector as a whole.
‘Time is everywhere,’ says LVMH executive Jean-Claude Biver.
‘Time is everywhere,’ says LVMH executive Jean-Claude Biver. Photo: Fred Merz | lundi13 for The Wall Street Journal

The decline has led watchmakers to lay off hundreds of workers and buy back thousands of expensive, unsold watches, prying off their jewels and melting down their metal components.

“It’s not only a crisis,” says Antonio Calce, chief executive of Girard Perregaux, a watchmaker based in La Chaux-de-Fonds, Switzerland. “We must rethink the existing business model.”

Mr. Biver has helped LVMH’s watch division power through the downturn. Watch sales at the conglomerate’s two main brands, TAG Heuer and Hublot, hit record highs in each of the past three years. LVMH’s watches and jewelry division, which includes TAG Heuer, Hublot and Bulgari, recorded sales of €3.8 billion ($4.7 billion) last year, up 10%. Sales in 2016, one of the industry’s most difficult years in decades, rose 5%.

The executive acknowledges he is an unlikely candidate to reconnect the industry to young people. Today’s youth culture sometimes mystifies him, he says. Aside from watches, Mr. Biver’s passion is making his own cheese, produced from the milk of cows grazing on his farm in the Swiss Alps. Every year, he mails the cheese—aged for months into fragrant hunks—to friends and acquaintances around the world.

Mr. Biver credits a strategy that relentlessly targets younger consumers, even at the expense of traditions that have long endeared Swiss watches to older generations. Over the past few years, LVMH’s brands have enlisted Jay-Z and various street artists to design watches, signed models in their early 20s as “brand ambassadors,” bought ads in the virtual world of videogames and developed the Swiss industry’s first smartwatch. He compares the approach to the Roman Catholic Church’s 1960s-era reforms that allowed Mass to be celebrated in vernacular languages, not just Latin, ushering the church into the modern era.

“If you talk Latin to people who don’t understand, don’t be surprised that one day they won’t come anymore,” Mr. Biver says.
Price Watch

The materials and complexity of a watch can raise its price into the stratosphere.
Companies can spend years designing watches with multiple “complications,” or added functions, such as a calendar. The $1 million Vacheron Constantin Les Cabinotiers Celestia Astronomical Grand Complication 3600, which took five years to develop, has 23 complications.
Hublot spent millions of dollars on machines that carve components out of sapphire crystal—a lab-grown compound that’s one of the hardest materials on Earth. It’s used in the case and bezel (the ring around the cover) of Hublot’s $110,000 Big Bang Unico Perpetual Calendar Sapphire.
Tourbillon watches (here, the $148,800 Blancpain Tourbillon Volant Une Minute 12 Jours) can be especially pricey. Some of the watch’s mechanisms are in a constantly rotating cage; the idea is to counter gravity's drag for more accurate time-keeping.
Photos: Vacheron Constantin; Hublot; Blancpain

He relies on experts close to home: his 17-year-old son, Pierre, his 25-year-old stepdaughter, Carolina, and their friends.

On Pierre’s recommendation, Mr. Biver chose Jay-Z as a brand ambassador in 2011 and began developing a watch with the rapper. Called the Shawn Carter by Hublot, after Jay-Z’s real name, it came in two models: one in black for $17,900 and the other in yellow gold for $33,900. Both feature a transparent back displaying the watch’s complicated inner workings. Hublot says the watches, with 350 made in all, sold out.

In 2014, Mr. Biver was dining at Nobu in London with Pierre and Carolina when his children noticed the model Cara Delevingne at a nearby table. Ms. Delevingne had walked the runways of fashion houses in the LVMH empire and starred in Burberry advertisements with Kate Moss, but the watch executive hadn’t heard of her.

“You should take her!” the children said. “She is so cool, she is the future!”

“Huh?” Mr. Biver said.

He returned to his office in Switzerland’s Jura Mountains and told his marketing director, Valérie Servageon, to “check Cara Delevingne.”

“Who’s she?” Ms. Servageon said.

Months later, Ms. Delevingne signed on as a brand ambassador for TAG Heuer. Since then, Mr. Biver has hired the street artists known as Alec Monopoly and Mr. Brainwash and renowned tattoo artist Maxime Buchi to design watches for TAG Heuer and Hublot. Other brand ambassadors include the 21-year-old model Bella Hadid and basketball stars Kobe Bryant and Dwyane Wade.
Jean-Claude Biver and Cara Delevingne on Jan. 23, 2015.
Jean-Claude Biver and Cara Delevingne on Jan. 23, 2015. Photo: David M. Benett/Getty Images

The Swiss industry faced a new threat in 2014 when Apple announced its smartwatch, which can display emails, monitor physical activity and serve as an electronic wallet. Mr. Biver feared the Apple watch, priced as low as $400, could compete for customers of TAG Heuer’s least expensive models, which start at $1,000 and just tell the time.

But he also saw an opportunity: If TAG Heuer developed its own smartwatch, perhaps the brand could win a new, younger customer base for its mechanical watches.

The executive recruited computer programmers and electrical engineers to negotiate with global tech giants over the watch’s software and hardware. The team chose Google’s Android for the operating system and worked with Intel for the electronics.

Mr. Biver moved so fast that TAG Heuer’s first smartwatch couldn’t use the label “Swiss made.” Because the smartwatch relied heavily on non-Swiss suppliers, it was disqualified from using the label.

TAG Heuer unveiled its $1,500 “connected watch,” which had a step counter and could display emails and run other apps, in November 2015, just months after Apple’s smartwatch went on sale.

For a second version of the watch, which came out in March 2017, Mr. Biver landed the “Swiss made” label by persuading Intel to move its production processes to a subcontractor in Switzerland. In total, TAG Heuer has sold roughly 100,000 smartwatches, Mr. Biver says—encouraging the company that it can compete in the market.

The experiment, however, failed by one metric: It didn’t spark new interest in TAG Heuer’s mechanical timepieces. The company made an offer allowing customers to swap the smartwatch for a mechanical one for $1,500, but fewer than 10% of buyers have made the exchange, Mr. Biver says. The first version allowed buyers to make the swap after the two-year warranty expired, while the offer applied immediately to the second one.

“I must admit that I expected much more interest,” Mr. Biver says.
Hublot watchmakers at work in Nyon. Photos: Fred Merz | lundi13 for The Wall Street Journal(3)

Other watchmakers have started to try his strategies. Some have hired young celebrities as brand ambassadors. A few have started to develop smartwatches.

Swatch Group AG is designing a smartwatch that aims to safeguard the Swiss industry’s legendary self-reliance. Unlike Mr. Biver, Swatch Chief Executive Nick Hayek doesn’t want to depend on global supply chains controlled by big tech companies such as Google, Intel and Qualcomm for hardware and software.

“It doesn’t make sense to reproduce something that your mobile phone can do,” Mr. Hayek says.

Instead, Swatch is designing its own operating system and electronics for the watch. Relying on little-known Swatch subsidiaries that produce electronic components, the company is looking to design a smartwatch that can go a month or more without charging and wouldn’t become obsolete until years after most gadgets. Swatch aims to release it by the end of the year.

Mr. Biver got his start in Swiss watchmaking when it faced a previous existential threat: the advent of the quartz watch, an electronic timekeeping technology far more accurate and cheaper to produce than any mechanical watch. In the 1970s, Japanese watchmakers such as Seiko flooded the global market with inexpensive quartz timepieces, destroying the lower and middle tiers of the Swiss industry.

Swiss manufacturers rebranded themselves to survive, limiting their production and marketing their timepieces as the works of craftsmen. Mr. Biver, who began his watchmaking career in sales and worked his way up, and his friend Jacques Piguet purchased Blancpain, a Swiss brand on its deathbed because of the quartz revolution. Mr. Biver directed its engineers to focus on designing highly complicated mechanical watches. He also raised prices and proudly declared the company would never make a quartz watch. Revenue soon began to grow. (Blancpain is now owned by Swatch Group.)

In the late 1990s, Chinese consumers began to turbocharge the recovery of the Swiss watch industry. Enjoying newfound freedom, China’s rapidly growing ranks of wealthy consumers traveled the world, buying watches in Hong Kong, Europe, Los Angeles and New York.

Chinese demand helped the Swiss industry to ride out the 2008 financial crisis. Deep recessions in the West and Japan, however, hobbled buyers in the industry’s traditional markets. A new cohort of younger consumers in the U.S. and Europe saw less value in spending thousands of dollars on a watch, retailers and analysts say. The mobile phone, meanwhile, was becoming ubiquitous.

Then demand from China took a hit. The luxury watch—a favored gift to grease the wheels of business—emerged as a target of public outrage over official corruption just as China’s new leader, Xi Jinping, launched a sweeping crackdown on graft. In April 2016, Mr. Xi’s government boosted customs inspections and imposed fees to stop globe-trotting shoppers from bringing suitcases full of watches and other luxury goods into the country from overseas.

Back in Switzerland, Compagnie Financière Richemont SA, owner of Cartier, Vacheron Constantin and many other brands, spent more than $240 million buying back piles of unsold watches in 2016. Unsold watches continued clogging up Richemont’s wholesale distribution channels into late last year, leading company executives to float the possibility of another round of buybacks.

‘When you feel comfortable, you are entering the danger zone.’

Another LVMH watch brand, Zenith, saw its sales hit hard in the downturn. The brand had come to rely on Chinese clients for 60% of its sales. “To be so successful with the Chinese made our people feel comfortable,” says Mr. Biver, who has been with LVMH since 2008, when it bought Hublot, where he was CEO. “When you feel comfortable, you are entering the danger zone.”

Without Chinese shoppers driving growth, the industry’s problems in its biggest traditional markets—the U.S., Europe and Japan—became conspicuous.

Luxury watches suffered from the arrival of a new generation of consumers who want to collect experiences, not things, says Dan Coates of youth marketing research firm Ypulse in New York. For that, people look to their phones, equipped with everything from cameras to pedometers, he says.

On a January trip to Paris, Goncalo Pereira, a 27-year-old dentist from Portugal, strolled past luxury watch boutiques on Rue St. Honoré, one of the city’s famed high-end shopping streets. He wasn’t looking to buy.

“It’s a habit that I lost,” Mr. Pereira says. “I started checking time on the iPhone and stopped using watches.”

Swiss timepieces are “so expensive,” says his friend Beatriz Silva, 25. “With that money I could do so many other things, like go on a trip.”

The problem was particularly acute in the U.S. The market had never recovered from its pre-financial crisis peak in 2007. That left some executives questioning whether American consumers really cared about the craftsmanship that goes into Swiss watches.
A Brief History of Swiss Watchmaking
From the Protestant Reformation to Swatch to smartwatches
Apple starts selling its smartwatch in April 2015. A few months later, Swiss manufacturer TAG Heuer unveils its own connected watch for $1,500 (above). Other Swiss brands are developing their own.
In 1541, Geneva institutes Protestant reformer John Calvin’s ban on wearing ornamental objects. Swiss jewelers must do something else. They turn to watchmaking.
By the mid-1840s, Swiss manufacturers account for more than half of the world’s watch production. Above, men at work in a Swiss watch factory in the 1800s.
During World War I, the wristwatch becomes necessary military equipment for troops crouching in the trenches. Previously, wristwatches were mainly worn by women as jewelry, while men used pocket watches. The new habit sticks, and Swiss watchmakers capitalize on the demand.
In 1983, Swiss engineers launch the Swatch, a mass-produced quartz watch, after a flood of affordable quartz watches from Japan pushes dozens of Swiss watchmakers out of business. Sales of the Swatch soar. Above, models in Beijing in the 1990s.


In 1541, Geneva institutes Protestant reformer John Calvin’s ban on wearing ornamental objects. Swiss jewelers must do something else. They turn to watchmaking.
Hulton Archive/Getty Images
1 of 5
•••••

Most American consumers “don’t even know the difference between mechanical and quartz, I bet you,” says Mr. Hayek of Swatch.

A 2017 YPulse survey found that 29% of Americans under the age of 34 owned a traditional watch. Just 3% were planning to buy one in the next year.

When younger consumers do buy watches, they often look outside Switzerland. MVMT and Shinola, both based in the U.S., and Sweden’s Daniel Wellington are among the industry’s fastest-growing brands. They’ve managed to sell millions of watches to customers under 35 by keeping prices mostly below $1,000 and crafting canny marketing campaigns that rely on social-media influencers—people with large followings on Instagram or other social networks—to tout their timepieces online.

To figure out what young consumers want, Mr. Biver continues to consult with what he calls his “youth advisory board”—his son, his stepdaughter and their friends. Last year, he took them up on their advice to buy advertising space on the popular PlayStation racing game “Gran Turismo.”

“Young people are more excited about playing these games than watching Formula One on Sunday,” Mr. Biver says.

Pierre and his friends sometimes give Mr. Biver tours of youth hot spots in cities around the world. A trip to Japan led the executive to begin developing a mechanical watch inspired by Japanese animation, or manga.

Mr. Biver is in talks with HBO to design a watch based on the show “Game of Thrones” in time for the show’s last season next year, LVMH executives say. Negotiations are continuing. HBO didn’t respond to requests for comment.

The seasoned watch executive has also become a social-media influencer himself, a rare feat for a man old enough to collect a Swiss pension. Mr. Biver has garnered 125,000 followers on Instagram by posting photos of himself hobnobbing with his celebrity brand ambassadors. Statistics on his Instagram account report that more than half of his followers are between the ages of 18 and 24.

“How can I understand the millennials?” Mr. Biver says. “It’s impossible. I’m 68. I cannot understand. But I can learn.”

Write to Matthew Dalton at Matthew.Dalton@wsj.com
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Re: WSJ: Is Time Running Out on the Swiss Watch Industry?

Post by JP Chestnut » Tue Mar 13, 2018 10:12 pm

The watch industry has too many Bivers.

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Re: WSJ: Is Time Running Out on the Swiss Watch Industry?

Post by BacoNoir » Tue Mar 13, 2018 10:34 pm

Insightful article if you ask me. Gotta find a way to plug into each generation to keep sales up.
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Re: WSJ: Is Time Running Out on the Swiss Watch Industry?

Post by Ryeguy » Wed Mar 14, 2018 5:08 am

Kind of helps rationalize the Tudor / Lady Gaga connection.

I guess it really doesn't matter who the celebrity is, they just want someone who has a youth following to better promote their watches to that demographic.

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Re: WSJ: Is Time Running Out on the Swiss Watch Industry?

Post by JP Chestnut » Wed Mar 14, 2018 5:27 am

Young people are into watches. Why does everyone think a patek nautilus sells for $45k? It’s not because old guys decided to go crazy overnight.

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Re: WSJ: Is Time Running Out on the Swiss Watch Industry?

Post by Knome » Wed Mar 14, 2018 9:21 am

Patek also severely lowered production of their steel models, especially the 5711/12

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Re: WSJ: Is Time Running Out on the Swiss Watch Industry?

Post by YOHOHO » Wed Mar 14, 2018 10:18 am

Maybe this is wrong, but at this point I don't really care. There are plenty of watches have been produced to keep me busy. Current prices are nuts...F'em. So sorry they can't produce 5 million watches that cost 100K each... Maybe they need a kick in the nuts to get back on track.

who knows, but plenty of songs still reference Rolex, AP, Patek, etc...and custom jewelers like Ben Baller highlight them as well. Not that these indicate total market strength, but not sure death in around the corner.

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Re: WSJ: Is Time Running Out on the Swiss Watch Industry?

Post by Panerai7 » Wed Mar 14, 2018 10:29 am

I was at my AD the other day picking up another 1/2 link for my sub and I tried on that blue, not sure what reference number is, 3-hander PP Nautilus.
I think it was $29K, anyway I don't know what all the hype is about, it's so tiny and dainty and if I didn't know it was PP I wouldn't look at it twice. Oh well to each is own.

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Re: WSJ: Is Time Running Out on the Swiss Watch Industry?

Post by gamecock111 » Wed Mar 14, 2018 10:33 am

Thanks for sharing. It reminded me that I need to take my tag connected in and trade for a real watch.

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Re: WSJ: Is Time Running Out on the Swiss Watch Industry?

Post by gwells » Wed Mar 14, 2018 10:33 am

there's a reason the microbrand industry is still on the upswing. the swiss have left a huge hole behind in the affordable category.

i keep wondering at what point do they price themselves out. and keep being sad as the prices keep skyrocketing and not slowing down. i got into this hobby 5-10 years too late.

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Re: WSJ: Is Time Running Out on the Swiss Watch Industry?

Post by Joeprez » Wed Mar 14, 2018 11:10 am

gwells wrote:
Wed Mar 14, 2018 10:33 am
i got into this hobby 5-10 years too late.
I feel the same, oh yes...

In any case there are only three or four watches that I really want to get.

And to be perfectly honest, I've been wearing my Apple Watch a lot. Maybe is a fad but its a great everyday watch. I still wear my other watches but I understand the appeal and truly believe that the increasing prices of the swiss watch industry will not hold. My guess is that the industry will produce less watches (but not lower the prices). There will always be a demand for a Rolex when someone gets a big promotion, but I bet that person will also own a smartwatch or fitbit.
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Re: WSJ: Is Time Running Out on the Swiss Watch Industry?

Post by ds760476 » Wed Mar 14, 2018 1:15 pm

I just went back to financial services after 10 years away; a lot fewer of the “finance bros” wear Swiss sport watches than used to.

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Re: WSJ: Is Time Running Out on the Swiss Watch Industry?

Post by logan2z » Wed Mar 14, 2018 1:51 pm

My own watch spending has definitely slowed down. It's been over a year since I bought anything new and the only watches that are anywhere near my radar at the moment are lower-priced pieces like the recent Hamilton field watch reissue and a Stowa flieger.

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Re: WSJ: Is Time Running Out on the Swiss Watch Industry?

Post by Ryeguy » Wed Mar 14, 2018 2:31 pm

I think the Swiss watch industry missed the boat when it lost the "entry level luxury" market. The watch enthusiast crowd might go for a micro, but the remaining general population who might be interested in a decent (i.e. not plastic) watch are more likely to look at Seiko or Citizen. The only Swiss brand I can think of who plays at this "entry level luxury" (and by this I mean sub $1K) is Hamilton.

Most Swiss brands I can readily think of went the "aspirational" route, raising their prices and trying to copy Rolex's success in promoting the watch as a symbol of achievement. To a large extent, most have failed. I can't think of anyone in my circle of acquaintances (including multiple Rolex owners) who would look at a JLC (for example) and think "that person most be successful" in the same way they might look at a Rolex. Heck, I'd bet most of my acquaintances would be hard pressed to name any watch brands beyond Rolex and Timex.

I agree with Biver that your brand has to capture consumers when they are young, but not many of the 25-28 year olds I know are going to spring for a $10K - $15K "aspirational" watch at this stage in their lives. I believe you'll find many more 25-28 year olds who want to celebrate their first promotion with a $1K - $2K watch while they juggle student loans, maybe their first house mortgage, and maybe a car payment. The Swiss pickings are kind of slim in this price range. Maybe Oris, but again, you'll get more interest from your friends with a new iPhone than a new Oris (or that $2K trip to Costa Rica as the article mentions - which even as a watch enthusiast would be my vote!)

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Re: WSJ: Is Time Running Out on the Swiss Watch Industry?

Post by gr8sw » Fri Mar 16, 2018 9:13 am

"Back in Switzerland, Compagnie Financière Richemont SA, owner of Cartier, Vacheron Constantin and many other brands, spent more than $240 million buying back piles of unsold watches in 2016. Unsold watches continued clogging up Richemont’s wholesale distribution channels into late last year, leading company executives to float the possibility of another round of buybacks."

this boggles the mind... hope it jogged some sense into them?
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Re: WSJ: Is Time Running Out on the Swiss Watch Industry?

Post by Sidheguitarist » Fri Mar 16, 2018 10:13 am

Another factor is that, while the price of Swiss timepieces has rocketed upward, many other status objects have remained more closely tied with the cost of living. That name-brand status watch ticket price will now buy a lot of Harley sportster, custom 1911, classic Les Paul, etc. There are a lot of emotional buy ways to celebrate that first big job that remain more easily within reach. It's not even about enjoying or wanting a killer watch: you now have to want it that much more than an unending cornucopia of killer consumer choices.

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Re: WSJ: Is Time Running Out on the Swiss Watch Industry?

Post by Ryeguy » Fri Mar 16, 2018 10:54 am

gr8sw wrote:
Fri Mar 16, 2018 9:13 am
"Back in Switzerland, Compagnie Financière Richemont SA, owner of Cartier, Vacheron Constantin and many other brands, spent more than $240 million buying back piles of unsold watches in 2016. Unsold watches continued clogging up Richemont’s wholesale distribution channels into late last year, leading company executives to float the possibility of another round of buybacks."

this boggles the mind... hope it jogged some sense into them?
When they say $240 million, are they calculating that at internal / wholesale costs (what an AD pays to Richemont) or based upon the MSRP of the total number of watches purchased back?

If it is the MSRP, you are probably looking at a buyback of 16,000 units ($240M / $15K average MSRP per unit = 16,000).

If the number was based upon wholesale cost (i.e. buying back inventory at AD cost), you could be looking at nearly 50,000 unsold units ($240M / $5K average wholesale cost = 48,000).

Given the low production number of some Richemont watches, that could be nearly the entire year's manufacturing run.

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Re: WSJ: Is Time Running Out on the Swiss Watch Industry?

Post by Torrid » Fri Mar 16, 2018 12:28 pm

gwells wrote:
Wed Mar 14, 2018 10:33 am
there's a reason the microbrand industry is still on the upswing. the swiss have left a huge hole behind in the affordable category.

i keep wondering at what point do they price themselves out. and keep being sad as the prices keep skyrocketing and not slowing down. i got into this hobby 5-10 years too late.
I started just early enough to get low $1k Omega watches and had purchased an SMP. There was a wide array more of entry luxury at this price. Not so much anymore. I know the pricing and price increase structure of watch brands other than upping “exclusivity” to attract new buyers is to keep getting the same buyers to part with more money each time. Personally $1k has always been a sticking point price wise for me and 10-12 years later it feels like that’s not changing for me. Instead of following the price increases, my brands keep changing. Ball is a strong choice for me now and I think this one is finally enough of a keeper to not flip, but honestly the buying/selling hassle is getting much harder and it seems even the used market is getting more difficult.

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Re: WSJ: Is Time Running Out on the Swiss Watch Industry?

Post by Mr_Pacman » Fri Mar 16, 2018 1:14 pm

Torrid wrote:
Fri Mar 16, 2018 12:28 pm
I started just early enough to get low $1k Omega watches and had purchased an SMP. There was a wide array more of entry luxury at this price. Not so much anymore. I know the pricing and price increase structure of watch brands other than upping “exclusivity” to attract new buyers is to keep getting the same buyers to part with more money each time. Personally $1k has always been a sticking point price wise for me and 10-12 years later it feels like that’s not changing for me. Instead of following the price increases, my brands keep changing. Ball is a strong choice for me now and I think this one is finally enough of a keeper to not flip, but honestly the buying/selling hassle is getting much harder and it seems even the used market is getting more difficult.
You pretty much nailed it from my perspective as well. Perhaps I'm getting old, but it wasn't that long ago that near mint 2254 Seamasters were 1k to 1.2k and Speedy Pros were 1.5K. They seemed like great value compared to the 4k SeaDwellers and Subs.

Now, the equivalent SMP's and Planet Oceans are 5K and those 2254's (which are now in well worn condition and need full services) are 2.5K and Speedy Pro's are 4K.

Sure, there are lots of great 1K watches out there, but they are not on the same level as the entry level luxury watches from a few years ago. The late 90'/early 2000 Tudor Hydronauts and Tudor Chronos were a way to get a well built watch for a reasonable price, but Tudor's recent revival has sent those prices to the moon as well.

Oris is a brand I've been looking at more closely these days. Longines is another brand that reminds me of how Omega was 10 years ago, but there are only a couple of model that really interest me.

I'm down to 2 watches. A Speedy Pro and a daily wear Tudor Tiger Chronograph in gold/steel on a leather strap that has been through hell and back. I might try to snag an Oris Pro Pilot GMT if I can find a deal on a used one. Otherwise, I'm comfortable sitting on the sidelines and living vicariously through everyone on the forums.

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Re: WSJ: Is Time Running Out on the Swiss Watch Industry?

Post by Ryeguy » Fri Mar 16, 2018 1:23 pm

This goes back to what I said earlier about the Swiss watch industry failing to capture the young executive vote. While a Rolex DJ is still probably the symbol of upwardly mobile success, I think even that symbol is becoming dated.

The 20-something young manager looking to impress their colleagues is probably more likely to spend $1K on a new smart phone.

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Re: WSJ: Is Time Running Out on the Swiss Watch Industry?

Post by sierra11b » Fri Mar 16, 2018 7:17 pm

I don’t feel sorry for an industry that keeps raising prices and alienating would be buyers. They raised prices so fast in the last decade they’ve essentially skipped to the millennial generation brought up in the article, while leaving the would-have-been middle aged buyer in the dust on the prospect of potential ownership.

Many years ago I would have been jumping out of my skin after watching the latest Basel Rolex jubilee video, but I know out of the gate I’d have to sell-off 2/3 of my collection — 3-4 watches anyone would be proud to own — if a Coke were released, and I’d still be $2000 short after selling at bottom street prices.
Last edited by sierra11b on Fri Mar 16, 2018 9:04 pm, edited 3 times in total.

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sierra11b
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Re: WSJ: Is Time Running Out on the Swiss Watch Industry?

Post by sierra11b » Fri Mar 16, 2018 7:39 pm

Sidheguitarist wrote:
Fri Mar 16, 2018 10:13 am
Another factor is that, while the price of Swiss timepieces has rocketed upward, many other status objects have remained more closely tied with the cost of living. That name-brand status watch ticket price will now buy a lot of Harley sportster, custom 1911, classic Les Paul, etc. There are a lot of emotional buy ways to celebrate that first big job that remain more easily within reach. It's not even about enjoying or wanting a killer watch: you now have to want it that much more than an unending cornucopia of killer consumer choices.
Yep. I’ve mentioned it before here that the perceived value of watches vs. guns simply isn’t there. You could procure a cherry K22, K38, and 657 and have enough left over for custom grips, brass, bullets, powder and dies before getting into entry level territory with IWC.

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Torrid
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Re: WSJ: Is Time Running Out on the Swiss Watch Industry?

Post by Torrid » Sat Mar 17, 2018 3:11 am

sierra11b wrote:
Fri Mar 16, 2018 7:17 pm
I don’t feel sorry for an industry that keeps raising prices and alienating would be buyers. They raised prices so fast in the last decade they’ve essentially skipped to the millennial generation brought up in the article, while leaving the would-have-been middle aged buyer in the dust on the prospect of potential ownership.

Many years ago I would have been jumping out of my skin after watching the latest Basel Rolex jubilee video, but I know out of the gate I’d have to sell-off 2/3 of my collection — 3-4 watches anyone would be proud to own — if a Coke were released, and I’d still be $2000 short after selling at bottom street prices.
This is definitely the problem. It’s killing my interest in watches. I don’t find affordables all that interesting and I don’t want to be in the $5k and up market. If there was still a strong entry level luxury at <$2k it would drive a lot of sales. I’m bored with Seiko and while many go on about the Seiko value proposition, I don’t find there to be much quality performance wise in their offerings. Hamilton seems much better quality wise at barely higher prices, but I don’t find their watches to be all that interesting unfortunately despite being well made. The Swiss watch industry created the luxury watch market and now they seem to be killing it by getting a bit too greedy. I understand luxury and prestige being a huge selling point, but if they’re going far beyond the average watch buyers ability to pay, they’re completely pricing themselves out.

outtatime
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Re: WSJ: Is Time Running Out on the Swiss Watch Industry?

Post by outtatime » Sat Mar 17, 2018 6:45 am

So they desperately need to recapture some “young money”, yet they continue to move their prices into the stratosphere to create a false sense of exclusivity that simultaneously puts even their “Entry level” models out of the reach of most “young”individuals?

I think they’re doing it wrong.
Current
Alpina Extreme Diver 300 | Benarus Ti47 | Breitling Avenger Seawolf | Eterna KonTiki Super 1973 | Hamilton Jazzmaster Viewmatic | Hamilton Pan Europ | IWC Aquatimer 2000 | Korsbek Oceaneer | Linde Werdelin The One 2.6 | Omega Seamaster 300 Spectre | Omega Seamaster 300 Titanium | Omega Seamaster 2531.80 | Omega Speedmaster Broad Arrow | Panerai 005 | Rolex Deepsea | Steinhart Nav-B 6497 | Steinhart Ocean Vintage Military | Stowa Seatime | Zenith El Primero Stratos

Incoming


Considering
PAM 422 | AP Royal Oak 15400 Silver | Rolex Explorer II 42mm Polar | Omega PO 8500 XL


Sometimes it's easier just to watch

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Re: WSJ: Is Time Running Out on the Swiss Watch Industry?

Post by JP Chestnut » Sat Mar 17, 2018 6:51 am

outtatime wrote:
Sat Mar 17, 2018 6:45 am
So they desperately need to recapture some “young money”, yet they continue to move their prices into the stratosphere to create a false sense of exclusivity that simultaneously puts even their “Entry level” models out of the reach of most “young”individuals?

I think they’re doing it wrong.
Not only are they expensive, they’re hard to buy. So I’m a young big shit guy ready to by my first luxury watch and I walk into Rolex, ask for a basic sub, and am told “we will call you in six months”. That’s not a recipe for getting new buyers.

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